By Scott Benjamin
For at least a generation, a strong dollar policy has been considered as American as Madison Square Garden.
That policy was underscored about 30 years ago by former Wall Street executive Bob Rubin, who was director of the National Economic Council and Treasury Secretary under Democratic former President Bill Clinton.
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Wikipedia has reported that, “Rubin's motivation for introducing the strong dollar policy revolved around his desire to keep U.S. bond yields low, and to avoid criticism from trade partners that America was deliberately devaluing its currency to boost exports.”
However, Republican former President Donald Trump, the apparent nominee in 2024, has said there are benefits to a weaker dollar.
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In her recent book, “Paper Soldiers, Bloomberg News Senior Washington Correspondent Saleha Mohsin stated, “Trump made no secret of his belief that a weaker dollar would be better for American workers – a view now being taken hold more widely.”
“For decades, America has performed as current superpower-strong,” she wrote. “The robust dollar created an era defined by prosperity at home and imperial might abroad – backed up by a strong democracy.”
“But now a chorus of voices, both domestic and foreign, is questioning decades of economy orthodoxy,” Mohsin added.
However, U .S. Rep. Jim Himes (D-4) of Greenwich, recently told Patch.com that he has reservations about establishing a weaker dollar.
“A weaker dollar would help some people and hurt others,” the congressman said. “A weaker dollar is good for exporters, but it is very bad for importers. I’m not a big fan of the federal government manipulating the dollar. I am a markets guy. I sort of believe the dollar should trade what it trades. We have a massive import economy. You weaken the dollar and you raise the price of imports.”
Interestingly, the United States sought “sweeping” economic reforms in the final phase of Democratic former President Lyndon Johnson to strengthen a weaker dollar.
NBC Radio News reported on January 1, 1968 that Johnson had proposed, among other things, mandating cuts in foreign investment abroad and asking Americans to defer trips -other than essential tourism – to foreign countries.
NBC Radio News also reported that Johnson called for a tax increase. Just four years earlier he had signed an across-the-board supply-side tax cut that became the model for the 1981 Reagan, 2001 W. Bush and 2017 Trump tax cuts.
Resources:
NBC Radio broadcast of the 1968 Orange Bowl via Baseball Direct.
Saleha Mohsin, “Paper Soldiers,” Penguin, 2024.
